Lawsuit Accuses Troubled Crypto Lender Celsius Network of Fraud (reuters.com) 32
A former investment manager at Celsius Network sued the crypto lender on Thursday, saying it used customer deposits to rig the price of its own crypto token and failed to properly hedge risk, causing it to freeze customer assets. From a report: The complaint said Celsius ran a Ponzi scheme to benefit itself through "gross mismanagement of customer deposits," and defrauded the plaintiff KeyFi Inc, run by the former manager Jason Stone, into providing services worth millions of dollars and refusing to pay for them.
Shocked! (Score:4, Insightful)
I am shocked! Beyond belief! Shocked I tell you!
Does it even matter at this point (Score:2)
Once they started limiting withdraws outside their original terms, they went well into 'prey I do not alter it further' territory. Whatever the 'intents' were trusting any of these people with anything of value should be a non-starter at this point for anybody with sense.
Crypto-currency with nothing backing it.. (Score:1)
Crypto-currency with nothing backing it, not unlike the American dollar, except the dollar has Uncle Sam backing it. But lending money that is like Monopoly game money, only electronic bits--so suing for fraud seems like calling fertilizer smells like excrement. ??
Celsius could settle for so much Bitcoin...
JoshK.
Re: (Score:2)
Crypto-currency with nothing backing it, not unlike the American dollar, except the dollar has Uncle Sam backing it. But lending money that is like Monopoly game money, only electronic bits--so suing for fraud seems like calling fertilizer smells like excrement. ??
Celsius could settle for so much Bitcoin...
JoshK.
How can you say there's nothing backing this? What about all those NFT's?
Surely they're worth something.
Turtles?
Re: (Score:1)
Which is far from nothing. People are required to pay their taxes in US dollars, which creates a market for them. The US government also has a 200+ year record of paying its debts, which helps to convince people it's worth using.
Re: (Score:2)
Exactly my point. Fiat money since Nixon took the USA off the gold standard, but US backing it.
JoshK.
Shayna, they bought their crypto. (Score:5, Funny)
I say: let 'em crash!
Re:Shayna, they bought their crypto. (Score:4, Funny)
They knew what they were getting into. I say: let 'em crash!
Looks like I picked the wrong day to quit sniffing glue!
Hmmm. (Score:2)
What we can deduce from this lawsuit (Score:5, Insightful)
The plaintiff didn't benefit from the scam and is a sore loser.
Re: (Score:2)
Pretty much. Although it seems this was a scam in top of a scam. Not that it really matters.
Re: (Score:2)
Oh yeah. Cryptocurrencies are a whole ecosystem of scams. Just loko at NFTs.
In fact, I'm almost certain the more there are, the more the whole affair looks legit to potential suckers: to them, it's looks quite unlikely that an entire industry can exist solely on pure bullshit - especially a financial industry - and not be struck down by regulators at some point. And yet, it can and it does. It's quite incredible.
Re: (Score:2)
Well, yes. Until the regulators actually move in. They are slow to do that. They are generally slow. But the regulators will kill this stuff dead eventually. As I am doing some work as an auditor in some regulated industries, I have absolutely no doubt about that. All it probably needs is classifying crypto-exchanges as financial institutions (not banks), i.e. recognizing crapcoins as having some money-like characteristics. At that time they are screwed.
what?? (Score:2)
"The complaint said Celsius ran a Ponzi scheme to benefit itself"
It would really be a shame if crypto became associated with a Ponzi scheme!
Re: (Score:2)
The complaint is that they ran a Ponzi scheme on top of a known Ponzi scheme.
Re: (Score:3)
It's Ponzi's all the way down!
Re: (Score:2)
So instead of risking their clients money in real crypto they just stole it directly for themselves? If the clients sue and get at least some of it back, they might actually be better off than if they had put it into a real crypto company.
Re: (Score:2)
As far as I understand, yes. On both your points.
ponzi? (Score:2)
Re: (Score:2)
Who, you?
Because this is very much a Ponzi scheme - take in new investment money in order to pay out existing investors. And when there aren't new investors, the last ones in get fucked.
As a customer. (Score:2, Interesting)
Re:As a customer. (Score:4, Insightful)
"But as someone who actually has significant amount of crypto in Celsius, I can say it's not a ponzi. "
Are you trying to convince us, or yourself?
Re: (Score:2)
Please tell me what you've been smoking, because it must be the best shit ever to believe that anything in a crypto market is "too important to let fail".
Here's a hint: Lehman Brothers was worth $680B before it was worth $0.00 because it was not bailed out in 2008. The threshold for "too big to fail" is far higher than you think it is.
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Sure, just keep trying to convince yourself that you are not the greater fool. The market says otherwise with a new crypto company imploding literally every day now.
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" I can say it's not a ponzi."
Yes, it looks like a completely different kind of fraudulent activity.
MAKE MONEY FA$T!!! (Score:1)
1) Invest in crypto.
2) Lose your ass.
3) Sue to get a small fraction of your money back.